ROC
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______________ to _______________
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 26, 2021, the registrant had
Table of Contents
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Page |
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PART I. |
1 |
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Item 1. |
1 |
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Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 |
1 |
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2 |
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3 |
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5 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
6 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 |
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Item 3. |
16 |
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Item 4. |
16 |
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PART II. |
17 |
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Item 1. |
17 |
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Item 1A. |
17 |
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Item 2. |
61 |
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Item 6. |
62 |
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63 |
i
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
MINK THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
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September 30, 2021 |
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December 31, 2020 |
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ASSETS |
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Cash |
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$ |
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$ |
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Prepaid expenses |
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Other current assets |
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Total current assets |
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Equipment, net of accumulated depreciation of $ September 30, 2021 and December 31, 2020, respectively |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Accounts payable |
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$ |
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$ |
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Accrued liabilities |
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Other current liabilities |
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Convertible affiliated note, current |
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— |
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Due to related parties |
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Total current liabilities |
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Convertible affiliated note, non-current |
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— |
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Other long-term liabilities |
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Commitments and contingencies |
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STOCKHOLDERS’ DEFICIT |
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Common stock, par value $ and December 31, 2020, respectively |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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Accumulated deficit |
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Total stockholders’ deficit |
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Total liabilities and stockholders’ deficit |
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$ |
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$ |
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See accompanying notes to unaudited condensed consolidated financial statements.
1
MINK THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Operating expenses: |
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Research and development |
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$ |
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$ |
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$ |
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$ |
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General and administrative |
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Change in fair value of convertible affiliated note |
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Operating loss |
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( |
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( |
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Other income (expense), net: |
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Interest expense |
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( |
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( |
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( |
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( |
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Gain on extinguishment of debt |
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— |
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— |
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Other income (expense), net |
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( |
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( |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Per common share data: |
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Basic and diluted net loss per common share |
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$ |
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$ |
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$ |
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$ |
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Weighted average number of common shares outstanding |
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Other comprehensive loss: |
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Foreign currency translation gain (loss) |
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$ |
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$ |
( |
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$ |
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$ |
( |
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Comprehensive loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
) |
See accompanying notes to unaudited condensed consolidated financial statements.
2
MINK THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(Unaudited)
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Common Stock |
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Accumulated |
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Number of Shares |
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Par Value |
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Additional Paid-In Capital |
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Other Comprehensive Income (Loss) |
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Accumulated Deficit |
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Total |
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Balance at December 31, 2020 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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( |
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Net loss |
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— |
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— |
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— |
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— |
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( |
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( |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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Grant and recognition of stock options |
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— |
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— |
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— |
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— |
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Recognition of parent stock options |
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— |
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— |
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— |
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— |
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Balance at March 31, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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Net loss |
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— |
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— |
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— |
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— |
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( |
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( |
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Other comprehensive loss |
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— |
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— |
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— |
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( |
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— |
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( |
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Grant and recognition of stock options |
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— |
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— |
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— |
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— |
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Recognition of parent stock options |
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— |
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— |
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— |
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— |
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Balance at June 30, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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Net loss |
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— |
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— |
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— |
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— |
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( |
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( |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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Grant and recognition of stock options |
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— |
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— |
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— |
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— |
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Recognition of parent stock options |
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— |
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— |
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— |
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— |
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Option exercises |
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— |
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— |
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— |
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Balance at September 30, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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3
MINK THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(Unaudited)
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Common Stock |
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Accumulated |
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Number of Shares |
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Par Value |
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Additional Paid-In Capital |
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Other Comprehensive Income (Loss) |
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Accumulated Deficit |
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Total |
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Balance at December 31, 2019 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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Net loss |
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— |
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— |
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— |
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— |
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( |
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( |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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Grant and recognition of stock options |
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— |
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— |
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— |
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— |
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Recognition of parent stock options |
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— |
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— |
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— |
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— |
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Option exercises |
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— |
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— |
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Balance at March 31, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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Net loss |
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— |
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— |
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— |
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— |
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( |
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( |
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Other comprehensive income |
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— |
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— |
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— |
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( |
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— |
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( |
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Grant and recognition of stock options |
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— |
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— |
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— |
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— |
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Recognition of parent stock options |
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— |
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— |
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— |
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— |
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Option exercises |
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— |
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— |
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— |
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Balance at June 30, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Other comprehensive income |
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— |
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— |
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— |
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( |
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— |
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( |
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Grant and recognition of stock options |
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— |
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— |
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— |
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— |
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Recognition of parent stock options |
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— |
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— |
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— |
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— |
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Option exercises |
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— |
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— |
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— |
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Balance at September 30, 2020 |
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$ |
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$ |
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$ |
( |
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$ |
( |
) |
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$ |
( |
) |
See accompanying notes to unaudited condensed consolidated financial statements.
4
MINK THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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Nine Months Ended September 30, |
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2021 |
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2020 |
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Cash flows from operating activities: |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation |
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Share-based compensation |
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Interest accrued on convertible affiliated note |
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Gain on extinguishment of debt |
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( |
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— |
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Change in fair value of convertible affiliated note |
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Changes in operating assets and liabilities: |
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Prepaid expenses |
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( |
) |
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Accounts payable |
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( |
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Accrued liabilities and other current liabilities |
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( |
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Repayable advance received |
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— |
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Other operating assets and liabilities |
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Net cash used in operating activities |
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( |
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( |
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Cash flows from investing activities: |
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Purchases of plant and equipment |
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( |
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( |
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Net cash used in investing activities |
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( |
) |
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( |
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Cash flows from financing activities: |
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Proceeds from option exercises |
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Proceeds from the issuance of long-term debt |
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— |
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Proceeds from issuance of convertible affiliated note |
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Net cash provided by financing activities |
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Effect of exchange rate changes on cash |
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( |
) |
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Net (decrease) increase in cash |
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( |
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Cash, beginning of period |
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Cash, end of period |
|
$ |
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$ |
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|
See accompanying notes to unaudited condensed consolidated financial statements.
5
MINK THERAPEUTICS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Description of Business
MiNK Therapeutics, Inc. (MiNK or the Company) is a clinical stage biopharmaceutical company focused on developing allogeneic invariant natural killer T (iNKT) cell therapies to treat cancer and other life-threatening illnesses.
The Company has incurred losses since inception and, as of September 30, 2021, had an accumulated deficit of $
Management continually addresses the Company’s liquidity position and adjusts spending as needed in order to preserve liquidity. The Company’s future liquidity needs will be determined primarily by the success of its operations with respect to the progression of the Company’s product candidates and key development and regulatory events in the future. Potential sources of additional funding for the Company include: (1) pursuing collaboration, out-licensing and/or partnering opportunities for the Company’s portfolio programs and product candidates with one or more third parties, (2) securing additional debt financing and/or (3) selling equity securities.
MiNK’s product candidates are in various stages of development and significant additional expenditures will be required if the Company starts new trials, encounters delays in its programs, applies for regulatory approvals, continues development of its technologies, expands its operations, and/or brings its product candidates to market. The eventual total cost of each clinical trial is dependent on a number of factors such as trial design, length of the trial, number of clinical sites, and number of patients. The process of obtaining and maintaining regulatory approvals for new therapeutic products is lengthy, expensive, and uncertain. Because all of the Company’s programs are at an early stage of clinical development, the Company is unable to reliably estimate the cost of completing its research and development programs or the timing for bringing such programs to various markets or substantial partnering or out-licensing arrangements, and, therefore, when, if ever, material cash inflows are likely to commence.
(2) Significant Accounting Policies
The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the years ended December 31, 2020 and 2019 (annual financial statements), included in the Company’s Amended Registration Statement on Form S-1 filed with the Securities and Exchange Commission (SEC) on October 12, 2021. Since the date of those financial statements, there have been no changes to the Company’s significant accounting policies.
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete annual consolidated financial statements. In the opinion of the Company’s management, the condensed consolidated financial statements include all normal and recurring adjustments considered necessary for a fair presentation of the Company’s financial position and operating results. All significant intercompany transactions and accounts have been eliminated in consolidation. Operating results for the nine months ended September 30, 2021, are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from those estimates.
For the Company’s foreign subsidiaries, the local currency is the functional currency. Assets and liabilities of its foreign subsidiaries are translated into U.S. dollars using rates in effect at the balance sheet date while expenses are translated into U.S. dollars using average exchange rates during the period. The cumulative translation adjustment resulting from changes in exchange rates are included in the condensed consolidated balance sheets as a component of accumulated other comprehensive loss in total stockholders’ deficit.
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(3) Net Loss Per Share
Basic income and loss per common share is calculated by dividing the net loss by the weighted average number of common shares outstanding. Diluted income per common share is calculated by dividing net income by the weighted average number of common shares outstanding plus the dilutive effect of outstanding instruments such as stock options. Because the Company reported a net loss for all periods presented, diluted loss per common share is the same as basic loss per common share, as the effect of utilizing the fully diluted share count would have reduced the net loss per common share.
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Three and Nine Months Ended September 30, |
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2021 |
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2020 |
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Stock options |
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Non-vested shares |
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— |
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(4) Other Current Assets
Other current assets consisted of the following as of September 30, 2021 and December 31, 2020 (in thousands):
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September 30, 2021 |
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December 31, 2020 |
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VAT receivable |
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$ |
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$ |
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Insurance recovery |
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— |
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Deferred offering costs |
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Other |
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Total |
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$ |
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$ |
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(5) Accrued and Other Current Liabilities
Accrued liabilities consisted of the following as of September 30, 2021 and December 31, 2020 (in thousands):
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September 30, 2021 |
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December 31, 2020 |
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Payroll |
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$ |
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$ |
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Professional fees |
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Research services |
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VAT |
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— |
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Other |
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— |
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Total |
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$ |
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$ |
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Other current liabilities of $
(6) Share-based Compensation Plans
The Company’s 2018 Equity Incentive Plan provided for the grant of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code, nonstatutory stock options, restricted stock, unrestricted stock and other equity-based awards, such as stock appreciation rights, and stock units including restricted stock units for up to
In September 2021, the Company’s stockholders approved the 2021 Equity Incentive Plan (2021 Plan). The 2021 Plan provides for the granting of equity-based awards to the Company’s employees, directors and consultants. The provisions of the plan allow for automatic annual increases for the shares reserved under the 2021 Plan.
In September 2021, the Company’s stockholders approved the 2021 Employee Stock Purchase Plan (2021 ESPP). The 2021 ESPP initially provides for the issuance of up to
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The Company primarily uses the Black-Scholes option pricing model to value options granted to employees and non-employees, as well as options granted to members of the Company’s Board of Directors. All stock option grants have
A summary of option activity for the nine-month period ended September 30, 2021 is presented below:
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Options |
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Weighted Average Exercise Price |
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Weighted Average Remaining Contractual Term (in years) |
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Aggregate Intrinsic Value |
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Outstanding at December 31, 2020 |
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$ |
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Granted |
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Exercised |
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( |
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Outstanding at September 30, 2021 |
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$ |
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